Bitcoin Price Still Seeking Buyers Despite Passing Key Trendline

Stepping back, the leading cryptocurrency cleared the resistance of the trendline drawn between the July 25 high and Sept. 4 high on Oct. 10.

So far, however, the bullish breakout has failed to put a bid under BTC, leaving it directionless in a narrow range of $6,476–$6,376. At press time, it is changing hands at $6,395 on Coinbase.

The US stock markets fell sharply yesterday triggering a flight to safety across the globe. The heightened risk aversion, as represented by the 3 percent drop in the S&P 500, is bad news for bitcoin as the cryptocurrency is still being treated as a risky asset. Further, the blue-chip index has been leading the bitcoin market by 12 hours or more since last few weeks.

Hence, a range breakdown in BTC cannot be ruled out. However, if the cryptocurrency continues to show resilience in the next few hours, then the prospects of a range breakout would improve.

That said, a bullish reversal would be confirmed only above $6,810, as discussed earlier this week.

Daily chart

BTC's inability to capitalize on the violation of the falling trendline could be associated with the fact that the breakout lacked conviction, that is, it was a sideways breach, which is considered a sign of indecision in the marketplace.

As a result, attention has shifted to last week's high of $6,810, which, if scaled, may allow a sustained rally to the September high of $7,402.

4-hour chart

A break below $6,376 (lower edge of the range) may embolden the bears to push the cryptocurrency down to the crucial support of $6,230 (horizontal line on the above chart). Acceptance below that level would expose the next major support of the 21-month exponential moving average (EMA) lined up at $6,121.

However, if the bulls manage to push through $6,476 (upper edge of the range), then a rally to $6,810 cannot be ruled out.

Monthly chart

Over on the monthly chart, BTC seems to have carved out a bottom along the 21-month EMA. However, the 5-day and 10-day EMAs produced a bear cross last month. As a result, a break below the 21-month EMA cannot be ruled out as long as BTC is trading below the 10-month EMA of $7,114.

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- A range breakout could happen if BTC continues to defend the support at $6,376 despite the risk aversion in the financial markets. A break above $6,476, if confirmed, would open the doors to $6,810.- A range breakdown, if confirmed, would shift risk in favor of a drop to $6,230 and $6,120 (21-month EMA).- A weekly close (Sunday's close as per UTC) above last week's high of $6,810 would put the bulls in a commanding position.- A monthly close below the 21-month EMA will likely prove costly.